With a small but significant upgrade to Providence’s bond rating, Moody’s Investors Services Inc. has given the city a positive shot in the arm.
Crediting property tax revenue growth, as well as a pipeline of significant economic-development projects, and the city’s operating fund reserves movement from negative to positive in fiscal 2017, the rating agency believes that Providence’s bonds are investment grade, even if their actual rating is Baa1 and Baa2.
Should anyone feel overly positive, Moody’s also pointed out the city’s significant unfunded pension liability and its massive post-employment benefits overhang, not to mention expired labor contracts and low resident wealth and income.
The point is that while the city is being seen from the outside in a better light, there is still a long way to go. Mayor Jorge O. Elorza may have done a number of good things in his term. But if he really wants to be known as someone who gets things done, he needs to tackle the pension and OPEB issue. Only then will Providence feel free from the chains of poorly managed past administrations.
